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Erschienen in: Journal of Business Economics 1/2019

20.03.2018 | Original Paper

Measuring potential sub-unit efficiency to counter the aggregation bias in benchmarking

verfasst von: Heinz Ahn, Peter Bogetoft, Ana Lopes

Erschienen in: Journal of Business Economics | Ausgabe 1/2019

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Abstract

The paper deals with benchmarking cases where highly aggregated decision making units are in the data set. It is shown that these units—consisting of sub-units which are not further known by the evaluator—are likely to receive an unjustifiable harsh evaluation, here referred to as aggregation bias. To counter this bias, we present an approach which allows to calculate the potential sub-unit efficiency of a decision making unit by taking into account the possible impact of its sub-units’ aggregation without having disaggregated sub-unit data. Based on data envelopment analysis, the approach is operationalized in several ways. Finally, we apply our method to the benchmarking model actually used by the Brazilian Electricity Regulator to measure the cost efficiency of the Brazilian distribution system operators. For this case, our results reveal that the potential effect of the aggregation bias on the operators’ efficiency scores is enormous.

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Journal of Business Economics

From January 2013, the Zeitschrift für Betriebswirtschaft (ZfB) is published in English under the title Journal of Business Economics (JBE). The Journal of Business Economics (JBE) aims at encouraging theoretical and applied research in the field of business economics and business administration, promoting the exchange of ideas between science and practice.

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Metadaten
Titel
Measuring potential sub-unit efficiency to counter the aggregation bias in benchmarking
verfasst von
Heinz Ahn
Peter Bogetoft
Ana Lopes
Publikationsdatum
20.03.2018
Verlag
Springer Berlin Heidelberg
Erschienen in
Journal of Business Economics / Ausgabe 1/2019
Print ISSN: 0044-2372
Elektronische ISSN: 1861-8928
DOI
https://doi.org/10.1007/s11573-018-0901-0